Confused by tax code

6ft2oflovely

Hi

Please be nice, numbers are not my forte!

I earn £28,399 per annum from my employment. I also have an income of £10,970 from an NHS survivors pension per annum (since 2011). I live in Scotland.

I pay basic rate tax on the pension and use my full allowance against my salary ( I used to split the allowance across the two incomes but for ease I changed that pre this tax year).

My tax code on my employment has been the following according to my payslips

Oct 24- March 25 S1257L M1

Apr 25- May 25 S1221L

Jun 25- present S1210L

the pension has been SD0

When I check on HMRC online it tells me the decrease is

Adjustment to Rate Bands £464

something doesn’t feel right…. Why do I not get the full S1257L allowance against my employment when I am paying a basic rate on my pension

any help (explaining in layman’s terms) would be appreciated

Emma

eskbanker

What does the account show for your expected total income from all sources for this tax year, i.e. is it the same as those two annual figures and/or any other income?

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81881555#Comment_81881555

the pension is right at 10970 but the employment says 25808 as estimated taxable income

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81881562#Comment_81881562

Hmm, those still leave you well short of the higher rate threshold, which is where I was going with that - there's definitely no income shown other than those two figures, i.e. no savings interest, etc? Any underpaid tax in previous years? Not sure that either of those would actually be reflected as 'adjustment to rate bands' though, so hopefully someone more knowledgeable will be along soon!

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81881569#Comment_81881569

savings interest is £2

no other incomes or deductions…

6ft2oflovely

Definitely no underpaid tax previously….

molerat

On the face of it your codes should be S1257L and SD0. Your job alone is just into intermediate rate (£27491) so the whole pension should be taxed at that rate. With an estimate in your tax account of £25808 there shouldn't be any negative rate band adjustment. Is £28399 your actual P60 taxable income or are there deduction from that ?

6ft2oflovely

If they are ‘spreading it around’ isn’t that leaving me short as I’m not getting to utilise my full allowance

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81881601#Comment_81881601

£28,399 is my salary band I have been in since April 25.

I’ll give HMRC a call and see what they say… I wonder if I am better waiting until new tax year for that

molerat

What about pension deductions ?

If you don't get it sorted before year end you will have yo wait until October time to get any overpaid tax back.

6ft2oflovely

https://forums.moneysavingexpert.com/discussion/comment/81881619#Comment_81881619

I pay 5.5% monthly so I assume that and Tax and NI make it the 25,808 above